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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.26 percent. Selected operating data for the three divisions
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.26 percent. Selected operating data for the three divisions follow: $ Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets Peak View Grand 344,000 $ 236,000 $ 303,000 216,000 108,000 188,000 40,000 32,000 36,000 1,230,000 950,000 1,115,000 Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar.) Peak View Grand Residual Income (Loss)
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